NORTH'S BIGGEST EMPLOYER MOY PARK SOLD IN $1.5 BILLION DEAL - Northern Ireland's biggest employer Moy Park has been sold for $1.5 billion (€1.36 billion) to Brazilian food group JBS.
The UK's biggest poultry producer, which has its headquarters in Craigavon and employs 8,000 people in Northern Ireland, has been owned by another Brazilian-based company, Marfrig Group, since 2008. The purchase came as a shock as rumours have abounded over the last 12 months that Marfrig would float Moy Park on the London Stock Exchange, writes the Irish Independent. JBS said it expects to complete the purchase in the second half of 2015 and is subject to approval from European Union antitrust authorities. Moy Park employs 8,473 people in Northern Ireland and last year its pre-tax profits rose by 39% to £33.7m. In a statement, Jeremiah O'Callaghan, JBS SA investor relations officer, said: "The Moy Park acquisition was valued at $1.5 billion (£945m), adjusted by the working capital variation, as well as by the net debt of the Moy Park business at the conclusion of the transaction, which includes £300m in Notes due in May 2021. The balance will be paid in cash at the conclusion of the acquisition." JBS started to expand its international operations in 2007 in North America, but this is the first time the company has looked to the European market.
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INTEREST ON POOLBEG LOAN COSTING 13.5% - Funding for the building of the waste to energy incinerator in Poolbeg, Dublin, is coming from a company in Luxembourg with a structure similar to the ones that featured in last year's Luxleaks controversy over aggressive tax planning. The Dublin Waste to Energy project is a public-private partnership (PPP) between the four Dublin local authorities and the US company Covanta. Covanta is due to spend approximately €500 million developing the 600,000-tonne capacity incinerator, while the four authorities have already spent approximately €100 million on the project, writes the Irish Times. In September of last year the controversial incinerator cleared the last of many hurdles that had held up its development and is due to come onstream in 2017. Filings in Luxembourg show that a company there, Dublin First WTE, was incorporated in September 2014 and immediately entered into a stakeholder loan agreement with an Irish company, Dublin Waste to Energy (Holdings), for €75 million. The Luxembourg company is charging 13.5% per annum interest on the loan, which is to be repaid in 2029. The arrangement means that the taxable profits booked in Ireland by Dublin Waste to Energy (Holdings) will be reduced by the cost of servicing the debt to the Luxembourg company. One of the features of the Luxleaks controversy was the creation of entities in Luxembourg that created profit-reducing costs in other jurisdictions, while not producing comparable taxable profits in Luxembourg.
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BURDEN ON FIRST TIME BUYERS - First-time buyers bear a greater burden of the costs arising from mortgage lending restrictions despite being 30% less likely to default on their loans than other homeowners. Research by the Central Bank shows first-time buyers are far less likely to default on mortgages than their counterparts whose loans have been taken out on a subsequent property, says the Irish Examiner. However, the mortgage lending caps such as those introduced in Ireland earlier this year, which seek to stabilise the banking system and reduce the risk of a credit-induced collapse, is borne by first-time buyers more so than their peers. Such macro-prudential rules which include loan to value (LTV) and loan to income (LTI) limits impact heavily on first-time buyers, which generally form a younger cohort of homebuyer, given the greater difficulty they have in building up savings to buy a home. The findings of the report provide empirical evidence for tailoring macro-prudential policies - as the Central Bank did here - to reflect the additional burden placed by such policies. The new Central Bank research advises weighing the desire for financial stability with access to homeownership for first-time buyers.
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MARTHA STEWARD LIVING SOLD FOR $353m - Martha Stewart has sold her media and merchandising business to Sequential Brands, a retail licensing group, for about $353m, marking a dramatic fall in the value of an lifestyle business empire that was worth nearly $2 billion at its peak in 2005. Sequential is paying $6.15 a share, half in stock and half in cash, for Martha Stewart Living Omnimedia, the group that Ms Stewart built on the back of her talents in do-it-yourself crafting, cooking and decorating. Ms Stewart will become “a significant shareholder” of a new public holding company of Sequential and Martha Stewart Living and will serve on its board of directors, the company said. She will stay on as chief creative officer and “will continue to be an integral part of the brand”. New York-based Sequential has been snapping up celebrity brands and signing licensing deals with retailers. The sale brings to a close the independent existence of Martha Stewart Living Omnimedia. Martha Stewart Living made its founder a billionaire during the dotcom boom but the fortunes of Ms Stewart and her brand have ebbed. Forbes estimated her net worth at about $220m earlier this year, a decade after she last appeared on the magazine’s billionaires list. Ms Stewart’s public image has also experienced a rise and fall, from “domestic goddess” to white-collar criminal after she was convicted in 2004 of obstructing a government investigation and lying to investigators about a stock sale and spent five months in federal prison.
